Education Not Charity Alone; Private Unaided Schools Entitled To Surplus And Reasonable Returns: J&K And Ladakh High Court Disposes Fee-Fixation Challenge
Safiya Malik
The High Court of Jammu & Kashmir and Ladakh Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar, while deciding a batch of petitions by private unaided schools challenging the statutory fee-fixation framework and transport-fee orders, held that preventing commercialisation and profiteering is compatible with allowing institutions to generate surplus for future needs and reasonable returns on investment. The Court declined to invalidate the amendments creating the Fee Fixation and Regulation Committee and the fee rules, but found the provision permitting a senior government officer to head the committee inconsistent with the Supreme Court’s committee model, and directed that it be replaced with a chairperson who is a retired High Court judge nominated by the Chief Justice. It further directed that transport fees be fixed through an expert-linked exercise, and until then the existing transport-fee order of 06.10.2022 will govern, disposing of the petitions.
The petitioners asserted that they were unaided private educational institutions imparting education without government aid and that the impugned statutory framework conferred excessive powers on the FFRC to fix and regulate fees, contrary to binding Supreme Court decisions. It was contended that fee determination was undertaken without physical verification of statutory factors such as infrastructure, location, and expenditure, and that transport fee enhancements did not reflect actual increases in operational costs.
The respondents defended the amendments and rules as a statutory mechanism intended to prevent commercialisation and profiteering in education and submitted that the framework was consistent with Supreme Court directions and provided adequate regulatory safeguards.
The Court recorded that “Realizing that there is unstoppable growth of the private sector in the field of school education and failure of the public school system to come up to the expectation of the school-going children, the Government of late initiated steps to control and regulate the schools in the private sector.” It noted the framing issue in these terms: “How far it is permissible under the Constitution for the State to control and regulate admission and fee in private unaided education institutions has bothered the Apex Court on a plethora of occasions.”
On the character of education and the policy concern, the Court extracted the Supreme Court’s statement that “commercialization of education cannot and should not be permitted” and that “imparting education cannot be trade, business or profession.” It also quoted that “The question is how to encourage private educational institutions without allowing them to commercialize the education? This is the troublesome question facing the society, the Government and the courts today.”
Turning to present-day realities, the Court stated that “It would not be appropriate to say that the establishment of a private educational institution is purely and entirely a charitable activity. We cannot ignore ground realities and live in a hallucination.” It observed that “We must, therefore, live in reality, and the reality is that the private education system, which was envisaged to supplement the educational needs of the citizens, has virtually come to supplant the public education system.”
It recorded that “It is thus high time that the Government should change its mindset and promote and strengthen private schools by forbearing from interfering or causing unnecessary interference in their functioning.” It further stated that “The Supreme Court has already permitted educational institutions to collect fees in a manner that generates sufficient surplus annually to expand infrastructure and provide better facilities.”
The Court added: “It is high time the Government also recognises the right of a person who has made huge investments in terms of money and time to raise a private educational institution without any support from the Government to derive reasonable profits. After all, the establishment of these private educational institutions, particularly in rural areas, has become a source of employment for unemployed educated youth.”
On the boundary between prohibited and permitted outcomes, the Court stated that “undue profiteering and fleecing of students in the name of different kinds of fees should not be permitted.” It clarified that “The term ‘profiteering’ does not mean that educational institutions must be run on a no-profit, no-loss basis.” It recorded that “What is prohibited by law, as laid down by the Supreme Court, is treating the activity of imparting education as a business conducted only with a view to making profits.” It then stated: “Read together, commercialisation and profiteering do not completely rule out the element of creating surplus for future activities or earning reasonable returns on the investments made by an individual or educational agency permitted by the State to establish an educational institution.”
The Court directed that Section 20A(2) of the Jammu and Kashmir School Education Act, 2002, insofar as it permits appointment of “a Government Officer who has been a Financial Commissioner of the Union Territory or above” as Chairperson of the Fee Fixation and Regulation Committee, cannot be sustained. The Court stated that “sub-section (2) of Section 20A is admittedly not in consonance with the judgment passed by the Supreme Court and, therefore, cannot be allowed to remain on the statute book.”
“The Committee shall be headed by a Chairperson who has been a Judge of the High Court, to be nominated by the Chief Justice of the High Court of Jammu and Kashmir and Ladakh.”
The Court recorded that the remaining provisions of Sections 20A to 20J of the Act of 2002 and the Jammu and Kashmir Private Schools (Fixation, Determination and Regulation of Fee) Rules, 2022 do not suffer from constitutional infirmity and shall continue to operate. It stated that “Sections 20A to 20J cannot be said to render the amendments carried out to the Act of 2002 unconstitutional or contrary to the mandate of law laid down by the Supreme Court.”
“To begin with, the FFRC shall constitute a Committee which must, inter alia, comprise the Commissioner/Secretary to the Government, Transport Department, and the Commissioner/Secretary to the Government, Consumer Affairs and Public Distribution, to examine the issue and make recommendations for laying down broad guidelines for fixation of transport fees.” Such fees “once fixed for each school in terms of the aforesaid guidelines, can be periodically revised as and when public transport fares are increased by the Government, keeping in view the rise in fuel prices and other relevant factors.”
“Till this exercise is undertaken and transport fee is fixed in the manner aforesaid, the decision of the FFRC taken in consultation with the representatives of the Private Schools Association, J&K, and the J&K Unaided Private Schools Coordination Committee and translated into action vide order No. 09 of the FFRC dated 06.10.2022 shall regulate the transport fee/charges to be levied by private educational institutions.”
“The conclusions referred to in paragraphs 22 and 23 shall be kept in view by the FFRC while approving, disapproving, or suggesting the fee structure for a particular educational institution.”
The writ petition was accordingly disposed of in the above terms.
Advocates Representing the Parties
For the Petitioners: Mr. N.A. Beigh, Senior Advocate, with Mr. Mohd. Murshid Rashid, Advocate
For the Respondents: Mr. T.M. Shamsi, DSGI, with Ms. Shagufta Maqbool, Advocate
Mr. Mohsin Qadri, Senior AAG, with Ms. Maha Majeed and Mr. Mohd. Younis Hafiz, Advocates
Case Title: New Convent High School & Others v. Union of India & Others
Case Number: WP(C) No. 1070/2022
Bench: Justice Sanjeev Kumar, Justice Sanjay Parihar
